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The entertainment platform recorded a bad start to the year, since the Netflix shares fell as much as 20% to $404.50 on Thursday in after-hours trading., faced with a weak growth outlook for its immediate future, reported CNN.
Netflix has 221.8 million subscribers globally and made 8.3 million subscribers in the fourth quarter of 2021, according to company reports.
The collection of new subscribers did not reach the expectations of the company itself, which slightly overestimated the number of subscriptions to the consider reaching 8.5 million.
Netflix had also forecast that it would have 224.3 million subscribers by the first quarter of 2022, which means a growth of only 2.5 million, which is less than what analysts expected.
In terms of earnings, in the fourth quarter the platform earned $607 million, compared to $542 million in the prior year quarter, while revenue rose 16% to $7.7 billion.
In a message to investors, the company acknowledged that the Competition from streaming services may be affecting its marginal growth, however, made it clear that they continue to grow in all the countries and regions where they have a presence.
“This reinforces our view that the biggest opportunity in entertainment is the transition to streaming,” the company said.
Netflix explained that the company’s retention and engagement remain healthy, but that its growth has not accelerated again to pre-Covid-19 levels.
For the company there are factors that explain the current results, such as the recent increase in Covid-19 and macroeconomic difficulties in various parts of the world.
Netflix explained that in this context, the reasons why it announced a few days ago that it would raise prices in the United States and Canada, two of its most important markets.
In the United States, the subscription price for the standard Netflix plan has increased by $1.50 to $15.49. The basic plan went up $1 to $9.99, while the premium plan increased by $2 to $19.99.
Among the favorable aspects of its report, Netflix highlighted that in the US and Canada the subscriptions increased by 1.2 million in the fourth quarter, a considerable jump from the approximately 70,000 subscribers added in the previous quarter.
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Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.